Challenging narratives : the importance of informal volunteering

This working paper seeks to highlight two issues. Firstly, that the research community often ignores the importance of informal volunteering, and secondly that to do so causes most harm to working-class communities

Baden-Powell’s Scouting for Boys : governmentality, state power and the responsibilization of youth

This paper will focus on two issues – those of responsibility, and how state power has gone through a transformation, from, as Simon Gunn has put it, ‘hegemony to governmentality’, and also on the impact of social class on ideas of participation for young people in organisations such as the scouts at the turn of the nineteenth century, and modern day volunteering

Youth volunteering policy : the rise of governmentality

Young people are increasingly encouraged to volunteer, perhaps as a panacea to combat personal and social problems (Sheard, 1995). This paper will explore why volunteering policy has developed this instrumental tendency in recent history. It will analyse Michel Foucault’s theories of governmentality, and use these as a frame to consider the advances made in youth policy over the last half century, but with particular regard to volunteering policy in the last 15 years. Using governmentality as a tool of analysis, it will argue that volunteering policy has become a device to responsibilize younger generations; a method to improve the authority of the young over their own lives and their local areas, whilst moulding behaviour which brings about individual and collective wellbeing. It is also argued that this follows a natural progression of youth policies to tackle the ‘problem of youth’

'It's just part of what they do': Habitus, social class and youth volunteering policy

Encouraging young people to volunteer has emerged as a government priority over the last 15 years. Highly expensive schemes, such as the £200m invested in v, have been implemented to build on the existing volunteering infrastructure, develop community cohesion, social capital, and provide young people with the flexible skills and experiences they need to succeed in the jobs market. Drawing on research from two juxtaposed areas in England - one a deprived industrial town in the West Midlands called Eastwood, the other a prosperous borough called Croft in the South East - this paper and presentation offer initial conclusions as to what extent a government can mould its citizens into behaviours of voluntarism, especially those young people from hard to reach backgrounds

Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts

Expanding credit access is a key ingredient of development strategies worldwide. Microfinance practitioners, policymakers, and donors have ambitious goals for expanding access, and seek efficient methods for implementing and evaluating expansion. There is less consensus on the role of consumer credit in expansion initiatives. Some microfinance institutions are moving beyond entrepreneurial credit and offering consumer loans. But many practitioners and policymakers are skeptical about “unproductive” lending. These concerns are fueled by academic work highlighting behavioral biases that may induce consumers to over borrow. We estimate the impacts of a consumer credit supply expansion using a field experiment and follow-up data collection. A South African lender relaxed its risk assessment criteria by encouraging its loan officers to approve randomly selected marginal rejected applications. We estimate the resulting impacts using new survey data on applicant households and administrative data on loan repayment, as well as public credit reports one and two years later. We find that the marginal loans produced significant benefits for borrowers across a wide range economic and well-being outcomes. We also find some evidence that the marginal loans were profitable for the Lender. The results suggest that consumer credit expansions can be welfare-improving.Microfinance, credit impact, consumer credit

Identifying Information Asymmetries: New Methods and Evidence from a Randomized Field Experiment

This paper estimates the prevalence of asymmetric information in a consumer credit market using a field experiment of our design. A major South African lender issued 60,000 direct mail offers where the interest rate was randomized along two different dimensions — an initial “offer rate†on the direct mail solicitation, and a weakly lesser “contract rate†the applicant received after responding to the solicitation and agreeing to the initial offer rate. These two dimensions of random variation in interest rates, combined with the large sample (including 6,200 accepted offers) and complete knowledge of the Lender’s information set, will enable us to identify the prevalence and impacts of specific types of private information. Specifically, our setup distinguishes adverse selection from moral hazard/repayment burden effects on repayment and profitability, and thereby generates unique empirical evidence on the sources and importance (or lack thereof) of asymmetric information.adverse selection, moral hazard, field experiment

Expanding Microenterprise Credit Access: Using Randomized Supply Decisions to Estimate the Impacts in Manila

Microcredit seeks to promote business growth and improve well-being by expanding access to credit. We use a field experiment and follow-up survey to measure impacts of a credit expansion for microentrepreneurs in Manila. The effects are diffuse, heterogeneous, and surprising. Although there is some evidence that profits increase, the mechanism seems to be that businesses shrink by shedding unproductive workers. Overall, borrowing households substitute away from labor (in both family and outside businesses), and into education. We also find substitution away from formal insurance, along with increases in access to informal risk-sharing mechanisms. Our treatment effects are stronger for groups that are not typically targeted by microlenders: male and higher-income entrepreneurs. In all, our results suggest that microcredit works broadly through risk management and investment at the household level, rather than directly through the targeted businesses.microfinance, microcredit, microentreprenuership, risk sharing, formal and informal finance

Elasticities of Demand for Consumer Credit

The price elasticity of demand for credit has major implications for macroeconomics, finance, and development. We present estimates of this parameter derived from a randomized trial. The experiment was implemented by a consumer microfinance lender in South Africa and identifies demand curves that, while downward-sloping with respect to price, are flatter than recent estimates in both developing and developed countries throughout most of a wide price range. However, demand becomes highly price sensitive at higher-than-normal rates. We discuss several interpretations of this kink and present some related evidence. We also find that loan size is far more responsive to changes in loan maturity than to changes in interest rate. This pattern is more pronounced among lower income individuals, a comparative static that has been observed in the United States as well and is consistent with liquidity constraints that decrease with income.Credit Markets, Microfinance, Demand Elasticity, Development Finance, Maturity Elasticity, Consumer Credit

Observing Unobservables: Identifying Information Asymmetries with a Consumer Credit Field Experiment

Information asymmetries are important in theory but difficult to identify in practice. We estimate the empirical importance of adverse selection and moral hazard in a consumer credit market using a new field experiment methodology. We randomized 58,000 direct mail offers issued by a major South African lender along three dimensions: 1) the initial "offer interest rate" appearing on direct mail solicitations; 2) a "contract interest rate" equal to or less than the offer interest rate and revealed to the over 4,000 borrowers who agreed to the initial offer rate; and 3) a dynamic repayment incentive that extends preferential pricing on future loans to borrowers who remain in good standing. These three randomizations, combined with complete knowledge of the Lender's information set, permit identification of specific types of private information problems. Specifically, our setup distinguishes adverse selection from moral hazard effects on repayment, and thereby generates unique evidence on the existence and magnitudes of specific credit market failures. We find evidence of both adverse selection (among women) and moral hazard (predominantly among men), and the findings suggest that about 20% of default is due to asymmetric information problems. This helps explain the prevalence of credit constraints even in a market that specializes in financing high-risk borrowers at very high rates.Information asymmetries, field experiment, adverse selection, moral hazard, development finance, credit markets, microfinance